Airbnb is forecast to have $12.3 billion in bookings in 2016

Hard data on the financials of private company Airbnb are notoriously difficult to nail down.

But a new estimate by US investment bank Cowen & Company predicts that the bookings site will process $12.3 billion in reservations this year, up from an estimated $7.2 billion in 2015.

The estimates are based on a prediction that Airbnb will service 129 million guests this year. A related assumption is that the company’s own revenue may top $1.6 billion this year.

Analysts Kevin Kopelman and James Sullivan made the estimates in a research note released on Monday.

They also surveyed 1,400 US travelers (balanced to reflect the general population) to get a sense of Airbnb’s popularity.

About half of travelers who used Airbnb for business trips were more satisfied with Airbnb than with their average hotel stay (51% versus 10% preferring hotels and 39% being neutral). The numbers for leisure travelers were equally notable.

Yet the Cowen & Company survey found that high satisfaction didn’t mean that guests stopped using hotels. Almost all of the surveyed Airbnb customers said they had also used hotels in the past year. When examining the share of all booked stays, hotels still took 69% of Airbnb customers’ total nights.

In short, it’s not an either/or thing, and guests may prefer Airbnb-style lodging for some types of trips but not for others.

Kopelman and Sullivan write that Priceline and Expedia have hedged against the possible cannibalization of their business by Airbnb by investing in vacation rentals and other self-catering, short-term properties.

For example, the analysts estimate that 46% of the properties listed on Booking.com now are vacation rental properties (which are primarily in Europe and instantly bookable). For Priceline Group as a whole, the analysts estimate that vacation rentals today are responsible for about one in eight room nights reserved through its brands.

Expedia’s investment in HomeAway was similarly seen as a hedge that could offer the online travel protection from customer erosion by Airbnb.

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I hear there is a new game changer coming to town sometime during 2017 that plans to give Airbnb a real run for its money.

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